The GTA new home market saw improvements in September compared to the previous month, both in terms of new project openings and new home sales, particularly sales of condominium apartments, reports the Building Industry and Land Development Association (BILD).
There were 1,747 new homes sold in September, a considerable increase compared to August’s 974 new home sales, according to Altus Group, BILD’s official source for new-home market intelligence.
Condominium apartments in low, medium and high-rise buildings, stacked townhouses and loft units accounted for 1,494 of those new home sales, a 20 per cent decline year-over-year and down 20 per cent compared to the 10-year average. Single-family home sales, comprised of detached, linked and semi-detached houses and townhouses (excluding stacked) accounted for the remaining 253 home sales, a decrease of 28 per cent compared to September 2017 and down 77 per cent from the 10-year average.
September saw 10 condominium apartment projects and seven single-family home projects opening, causing remaining inventory to increase to 13,952 units, comprised of 8,820 condominium units and 5,132 single-family units. Remaining inventory includes units in preconstruction projects, projects currently under construction, and in completed developments.
According to Altus Group, the increase in new apartment sales and number of units in new projects launched was stronger than September sales typically suggest, indicating more buyers and builders are starting to become active.
David Wilkes, BILD’s president and CEO, said that while that is welcome news, consumers still lack a range of options in the new home market, due to a lack of supply. The condo apartment units in inventory represent about five months’ worth of inventory, based on the pace of sales over the past year. A healthy new home market should have between nine and 12 months’ worth of inventory.
This shortfall in the supply of condo units partly accounts for the closing gap between prices of condos and single-family homes in the GTA. In September, the benchmark price for condominium apartments climbed 19.4 per cent year-over-year to $789,643, while the benchmark price for single-family homes dropped 7.1 per cent year-over-year to $1,119,533.
“We look forward to working with our municipal partners to address the barriers that stand in the way of building the housing our region needs to accommodate growth,” said Wilkes, in a press release. “Some straightforward steps include making sure that government charges on new homes are fair, funding and building critical infrastructure, cutting red tape and speeding up building permits and inspections.”